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-11.70(-0.78%)

-0.67(-3.70%)

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Why L Brands Stock Dropped Today

What happened

Shares of L Brands (NYSE: LB) have dropped today, down by 5% as of 1:08 p.m. EDT, after the retailer reported fiscal second-quarter earnings. Lackluster results at the company's Victoria's Secret brand continue to weigh on results.

Operating income fell to $174.6 million and L Brands finished the quarter with 2,927 total stores.

Now what

The quarter also included a $39.6 million pre-tax charge ($0.11 per share) associated with the early extinguishment of debt. The company redeemed $764 million worth of notes over the summer and issued $500 million in fresh notes, reducing overall debt by $264 million.

Excluding these charges, adjusted net income was $67.6 million, or $0.24 per share, ahead of L Brands' guidance issued in May that called for $0.15 to $0.20 per share in adjusted profit. As reported under generally accepted accounting principles (GAAP), earnings per share came in at $0.14.

In terms of guidance, L Brands forecast fiscal third-quarter earnings per share of negative $0.05 to positive $0.05, and the company reaffirmed its full-year forecast of $2.30 to $2.60 per share in adjusted profits.